Page 9 - Banking Finance December 2016

RBI CORNER

RESERVE BANK

NEWS
NEWS
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NEWS
NEWS

Cash deposits to remain Utkarsh MF gets RBI nod for small finance bank
with RBI Utkarsh Micro Finance said it has re- Govind Singh said.

RBI's move of retaining with it all ceived final nod from the Reserve Bank Utkarsh Micro finance is
cash deposits of India to start operations as among the 10 entities which
with banks small finance bank. The new has received RBI's in-principle
made be- bank is likely to start banking approval to set up small fi-
tween Sep- operations by early 2017, the nance banks.
tember 16 micro financier said in a state-
and Novem- ment. The Varanasi headquartered
ber 11 is likely to result in a marginal MFI has operations in Uttar
rise in costs for banks, as about Rs 3.5 "We will continue to be committed to Pradesh, Bihar, Jharkhand,
lakh crore of money will flow out to the mission of financial inclusion and Maharashtra, Madhya Pradesh,
the RBI from the surge of deposits offer wide range of banking products to Chhattisgarh, Delhi-NCR, Uttarakhand,
made in the wake of the November the people," the MFI's MD and CEO Haryana and Himachal Pradesh.
8 demonetisation.
RBI in charge of monitoring card data breach
This could also lead to a delay in low-
ering of interest rates, against popu- The Reserve Bank of India (RBI) has taken complete charge of the action needed
lar opinion that the central bank is after the reported security breach of data on 3.2 million
likely to cut rates in the December debit cards. It said so at a review meeting it convened,
credit policy. attended by senior officials of banks, National Payments
Corporation of India and card network operators. Lenders
"There would be marginal impact on were told to not issue any more communication on card
banks and hence the costs could rise misuse; RBI said it would do all that.
as they earn no interest on the
money kept with RBI, but will have RBI allows banks to park old currency at district chests
to pay interest on deposits. Banks
may cut rates, but (only) after this RBI has allowed lenders to park Rs 500 and Rs 1,000 notes at currency chests,
move is reviewed on December 9," at the district level in view of mounting deposits due to the domonetisation drive.
NS Venkatesh, executive director, The central bank said a currency chest operating at the point to be called Des-
Lakshmi Vilas Bank told. ignated Chest (DC), which will be required to operate a separate vault - to be
Any deposit in banks would attract named Chest Guarantee Vault (CGV) - as an extended arm of it.
interest rate of at least 4% interest Banks, preferably those not having any currency chest, will deposit such notes in
to be paid to the account holder, sealed boxes and will get the value of the notes to the credit of their current a/
thereby increasing costs to the bank. c with the chest branch, RBI said in a notification.

BANKING FINANCE | DECEMBER | 2016 | 9

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